Mumbai is South Asia’s most expensive place to live in July 2012 overall. Mumbai is followed by New Delhi and Surat.

The most worlds most expensive place to live, based on the overall cost of living, encompassing all cost of living baskets is Hong Kong having overtaken Tokyo to top the latest international cost of living rankings.

Moscow is the worlds most expensive based on the cost of living excluding the housing, education, healthcare and transport baskets, while Mumbai is also most expensive in South Asia on this basis. Many companies cover these costs on behalf of the employee while on international assignments.

The rankings are based on data collected for 780 international locations, covering every country world-wide.

The cost of living (COL) data collected is representative of an expatriate lifestyle. The components of the COL data are local prices for fixed quantities of the same goods and services in each location, local inflation and exchange rates. Prices in each location are affected by availability (i.e. supply & demand) as well as local pricing regulations and taxes on goods and services (e.g.premiums on luxury brands). Local inflation is usually representative of local price increases which in turn impacts an expatriates purchasing power in the host country. The exchange rate impacts both the price of imports to the host country and the expatriate assignment salary calculation between the home and host country. The cost of living has a significant impact on the purchasing power of an expatriate’s salary package.

As the overall global most expensive place to live, Hong Kong has an overall cost of living index of 149.14, followed by Tokyo with 142.12, and Zurich with 137.12. By contrast Mumbai, which is the 345th most expensive place in the world to live, has an overall cost of living index of 81.41. The overall index is comprised of 13 different basket groups. The assumption using the overall index is that everything is paid from the salary package. In addition, the cost of living calculations are weighted according to typical monthly international expatriate spending patterns. The Household Accommodation Basket for example, has a weighting of 30%, while the Groceries Basket has a weighting of 16.5%. That means that an international expatriate who, for example, earns 10,000 would typically spend 3,000 (30% of 10,000) on housing and 1,650 on groceries.

To provide an assignee, sent from a low cost of living country to a more expensive country, with a similar purchasing power to what they have in their home country, requires an adjustment to their assignment salary. The amount of adjustment depends on which country they come from. The larger the difference in cost of living, the larger the adjustment required to ensure a similar level of purchasing power in the host country.

Mumbai is expensive compared to cities in the South Asia region, but is still considered much cheaper than many western cities. Mumbai’s overall cost of living index of 81.41 is significantly lower than cities such as London (48% more expensive), Rome (25% more expensive), New York (23% more expensive) and Cape Town (11% more expensive). Although, within the context of the region, Mumbai is considered particularly expensive for household accommodation and groceries, a 3 bedroom apartment in Mumbai costs around 67,000 INR / 1,200 USD rent per month compared to Rome at around 2,400 EUR / 3,000 USD per month. Similarly a litre of milk which costs around 40 INR / 0.72 USD in Mumbai costs around 10 ZAR / 1.20 USD in Cape Town.

Cost of Living Rank – South Asia Locations – Overall Cost of Living & All Baskets (Highest to Lowest):

Xpatulator.com’s cost of living data is based on prices for the same quantity and quality of goods and services, representative of expatriate lifestyle, in each city. The data is collected and updated on a quarterly basis. The cost of living data is used by Xpatulator.com clients to calculate salary purchasing power parity, cost of living allowances, and customized (i.e. clients can select their own base city) cost of living indexes for expatriate assignments online, using Xpatulator.com’s 3 premium content calculators.

The 13 basket groups do not count equally and are weighted according to expatriate expenditure norms as follows (weighting percentage is in brackets):

Xpatulator.com is the most comprehensive source of international cost of living information. We provide free international cost of living overviews and rank information covering 13 cost of living baskets and every country around the world as well as premium content calculators.

Founded in 2007, Xpatulator.com’s mission is to organize the world’s cost of living indices, exchange rates and relative hardship indices and make it accessible and useful to all.

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Xpatulator.com is a website that provides international cost of living information and calculators that can help you determine cost of living indexes, cost of living allowances, salary purchasing power and international assignment packages to compensate for cost of living, hardship, and exchange rate differences.